When not to contact your insurance company

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When not to contact your insurance company
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The extreme TV advertising of insurance companies has led people to comparison shop their insurance in larger numbers than before. While that sounds like a good thing, the insurers don’t like it and have found a sneaky way to push back on your ability to jump ship for another company.

Read more: What role does credit play in setting car insurance premiums?

Hidden dangers of roadside assistance and more

You know when your auto insurer offers roadside assistance as part of your policy? Have you ever used that roadside assistance? I hope not…

Some auto insurers that offer roadside assistance treat your use of it as an at-fault claim and put that through on your CLUE report. What’s a CLUE report? CLUE stands for Comprehensive Loss Underwriting Exchange. It’s a shared database insurance companies report to when you make a claim. If you have too many claims on your CLUE report, that could make you radioactive to other insurers for 3 years.
 
So here’s the rule No. 1: Never get roadside assistance from your own insurer. Get it from AAA or elsewhere.

Read more: Emergency roadside assistance app is an alternative to AAA
 
Second, a number of insurers are now also treating an inquiry where you call in and ask a simple benign question as something they slap through to your CLUE report!
 
What’s going on here? Basically, insurers are increasingly frustrated by comparison shoppers who have allegiances that can shift easily based on heavy TV advertising. So they’re trying to hit you with a mark of shame to make their competitors turn up their noses at you.
 
Doing sneaky, tricky things like putting a phone call as a claim — or the use of roadside assistance as a claim — shouldn’t be allowed. But LexisNexis — the company that maintains the CLUE report database — has no standards about this stuff, so insurers can put through anything they want as a claim.
 
One other thing to note: When it comes to making small but legitimate claims, I’ve been fierce as far back as I remember that you shouldn’t do this. What you should do instead is take the highest deductible that the insurer or your auto financier will allow and that you can afford. Typically that is a $1,000 deductible.
 
You *never* want to make a claim on auto insurance for something small like a cracked windshield because the consequences are so ugly. The insurer may surcharge you for a number of year; eliminate discounts you would otherwise qualify for; or mark you as I described above so you can’t shop with the competition.
 
You need to think of home and auto insurance as going back to its original purpose: For catastrophic circumstances only!

Read more: Best auto insurance companies

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Clark Howard About the author: Clark Howard
Clark Howard is a consumer expert whose goal is to help you keep more of the money you make. His national radio show and website show you ways to put more money in your pocket, with advice you can trust.
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